Jasper
The latest podcast from Nico and Darren is about the Dutch system which Nico reckons a better comparator with the British pension system than Australia – I agree and this session tells us why.
In this episode of V-FM Pensions , Jasper Haak is a solid representative of the Dutch pension system and one of the best guests in 159 episodes.
The boys discuss the “Wet toekomst pensioenen”, the Dutch “Future of Pensions Act”, which came into force in 2023 and refocuses the second pillar away from defined benefit / ambition towards collective and individual DC.
The boys chat through what this all means for the Dutch pension system from a member and investment perspective, the transition of assets and its impact on accrued rights, and, of course, ask Jasper what value for money means to him.
A CDC system that Jasper is betting will change
There is a lot of the British CDC system in what Dutch employers can participate in as part of their “pillar 2”.
It is collective, has a single fund , pays pensions and is opening up as an alternative to DB schemes which employers can no longer accrue benefits in.
Where it differs from the British workplace CDC (the one that’s available now) is that it does not distribute surplus funds through pensions or adjust increases downwards in bad times. Instead , rather than avoiding surpluses and deficits, the Dutch system builds up a reserve that it can distribute when times are hard.
This is what Jasper Haak objects too. He has gone so far as to bet with a colleague that the reserve won’t work. He would no doubt have been joined by the DWP who rejected the idea of a reserve as a can of worms. Nico is for the reserve and this may be a legacy of our legacy of “with profits” but I think we have moved on in the UK and the Dutch have yet to work out the advantage of the UK approach.
The Dutch has a pillar three which is available to employers who are happy to give employees money which they can invest into personal pensions. As we found out a quarter of a century ago, the choice of more cash in hand or paying personally from bank account to pension account was not popular. It is not proving popular in the Netherlands either.
A very good guest who has the right attitude to prize giving
Haak is blunt about his scheme winning a WTW prize for being Dutch scheme of the year. “It’s because we’ve got the highest contribution rate” , he quips.
If only we could be as sceptical about prize winning, it rarely throws up winners on merit and is typically won by the contestant who best matches the agenda of the award givers.
Good luck to the boys who are putting themselves up for some prizes, if by some remote chance, they do not win their prize(s) they should remember Jasper’s warning. If they win the warning stands they should remember Jasper once more. Anyone who stands or falls on prizes given late at night to over-pampered attendants of prize-givings, is wasting time and money!
